{"id":54588,"date":"2023-10-05T14:25:56","date_gmt":"2023-10-05T14:25:56","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank"},"modified":"2023-10-05T14:42:41","modified_gmt":"2023-10-05T14:42:41","slug":"huge-problems-for-south-africas-new-state-owned-bank","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank","title":{"rendered":"Huge problems for South Africa\u2019s new state-owned bank"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>South Africa\u2019s new state-owned bank, Postbank, is now imminent \u2013 but the government faces several financial, governance and social issues with the group.<\/p>\n

Last week, President Cyril Ramaphosa signed the Postbank Amendment Bill into law, formally transferring the PostBank shareholding from the embattled South African Post Office to the government.<\/p>\n

This will allow for the creation of a Bank Controlling Company \u2013 the new holding company of a bank.<\/p>\n

Postbank said that its primary objective will be to offer affordable financial services to communities catering for traditional retail banking, SMEs and the public sector.<\/p>\n

The bank is, however, facing several headwinds ahead of its planned launch in 2024\/25.<\/p>\n

Financial loss<\/p>\n

As reported by EWN, the Postbank recorded a net loss of R2 billion during the 2022\/23 financial year, following a R302 million profit in the last year.<\/p>\n

Postbank CEO Nikki Mbengashe said that the payment of grants was mainly responsible for the loss, with significant investment in manpower and supplementary services for physical cash payments.<\/p>\n

Last year, the bank was given the responsibility of paying grants to over seven million recipients by the Post Office, which caused many of the group\u2019s challenges in the last financial year.<\/p>\n

Nevertheless, the bank said that it remains solvent, given the value of assets, even with the major loss.<\/p>\n

Leadership Hole<\/p>\n

The bank also faces a leadership vacuum, with the vast majority of the board resigning from their roles, which they claimed was due to a breakdown in their relationship with Minister of Communications and Digital Technologies, Mondli Gungubele.<\/p>\n

The Minister argued that the board had preemptively resigned, with the knowledge that they would be removed from their positions. Gungubele removed the final board member soon after and placed the company under administration.<\/p>\n

He argued that one of the reasons that the board was fired from their role was the continued use of an allegedly illegal software contract worth R140 million.<\/p>\n

\u201cPostbank has had a disclaimer for no less than two years. No serious-minded nation can allow a financial institution to tolerate that. Normally, financial institutions are held in the highest regard as compared to any other institution,\u201d he said.<\/p>\n

\u201cA serious-minded leadership would not allow this to continue like this, and somebody had to accept the responsibility. In our view, the board had to accept that responsibility.\u201d<\/p>\n

Failure to pay grants<\/p>\n

The Postbank is also facing an uphill battle in paying grants, leaving millions of South Africans at risk.<\/p>\n

The latest General Household Survey by Stats SA said that nearly 25% of South African households rely on grants as their primary source of income, whilst grants were the second most important source of income for roughly half of South Africans after salaries.<\/p>\n

However, in early September, Postbank said that it experienced technical issues, which impacted the ability of nearly half a million SASSA grant beneficiaries to access their funds from ATMs and retailers.<\/p>\n

Despite the technical issues seemingly being resolved, there have still been several issues at the start of October.<\/p>\n

News24 reported that several Postbank outlets in KwaZulu-Natal ran out of cash, with officials telling beneficiaries to collect their grants from ATMs and retailers. City Press also noted that some beneficiaries who weren\u2019t paid in September have not been paid the outstanding amounts.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. South Africa\u2019s new state-owned bank, Postbank, is now imminent \u2013 but the government faces several financial, governance and social issues with the group. Last week, President Cyril Ramaphosa signed the Postbank Amendment Bill into law, formally transferring the PostBank shareholding from the embattled South African Post Office to the government. This will […]<\/p>\n","protected":false},"author":84,"featured_media":54587,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-54588","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nHuge problems for South Africa\u2019s new state-owned bank - South Africa<\/title>\n<meta name=\"description\" content=\"South Africa\u2019s new state-owned bank, Postbank, is now imminent \u2013 but the government faces several financial, governance ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Huge problems for South Africa\u2019s new state-owned bank\" \/>\n<meta property=\"og:description\" content=\"South Africa\u2019s new state-owned bank, Postbank, is now imminent \u2013 but the government faces several financial, governance ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-05T14:25:56+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-05T14:42:41+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/10\/sm_1696504258.548816.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"768\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Huge problems for South Africa\u2019s new state-owned bank\",\"datePublished\":\"2023-10-05T14:25:56+00:00\",\"dateModified\":\"2023-10-05T14:42:41+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank\"},\"wordCount\":560,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/10\/sm_1696504258.548816.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/huge-problems-for-south-africas-new-state-owned-bank\",\"name\":\"Huge problems for South Africa\u2019s new state-owned bank - 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